Indiabulls mulls raising $1 bn

Indiabulls Financial Services, the country's second-biggest consumer finance company by market value, plans to raise $1 billion to tap rising demand from borrowers as the economy heads for a third straight year of 9 per cent growth.

The Mumbai-based company, partly owned by Citigroup Inc, Merrill Lynch & Co and Goldman Sachs Group Inc, will seek approval from its shareholders on February 1, it said in a filing to the stock exchange on Monday.

It will target overseas investors by selling shares or bonds convertible into stock, the statement said.

"Since a lot of global investors want to benefit from rising consumerism in India, companies like these are an avenue for investment," said P R Dilip, managing director at Impetus Wealth Management in Mumbai.

Indiabulls, which initially sold shares in 2004, provides loans to developers as well as to buyers of homes and trucks, through more than 650 branches across India.

McKinsey & Co, the New York-based consulting firm, estimates that the middle class - those with annual disposable income between $4,380 and $21,890 at current rates - will increase more than 10-fold to 583 million people by 2025.

Indiabulls is sharpening its focus on consumer finance, with plans to take public its securities trading company later this month after spinning off the real estate business as a separate listed company last year.

Indiabulls, which sold which sold $275 million of American depositary receipts in May last year, didn't disclose what it will do with proceeds from its present fund-raising plan.